Sangat Sahib Bhai Pheru Sikh, Fridkot V. The Commissioner of, Bathinda

ITA 422/ASR/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73209 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-01-2014
• Assessment Year: misc
• Appeal Filed On: 18-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 422(ASR)/2010 ASSESSMENT YEAR: NIL PAN: AABTS7402H SANGAT SAHIB BHAI PHERU VS. COMMISSIONER OF INC OME SIKH EDUCATIONAL SOCIETY, TAX, BATHINDA. FARIDKOT (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA, ADVOCATE RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 27.01.2014 DATE OF PRONOUNCEMENT: 10.02.2014 ORDER PER BENCH 1. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINS T THE IMPUGNED ORDER DATED 31.08.2010 PASSED BY LEARNED COMMISSIO NER OF INCOME TAX, BATHINDA, UNDER SECTION 80G(5)(VI) OF THE INCOME TA X ACT, 1961. 2. THE APPELLANT/APPLICANT SOCIETY APPLIED FOR APPR OVAL UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 22.03.2010 ACCOMPANYING BY THE COPIES OF THE AUDIT REPORTS FOR THE LAST THREE YEARS AS WELL AS THE CONSTITUTION OF THE SOCI ETY. THE COMMISSIONER 2 I.T.A. NO. 422(ASR)/2010 OF INCOME TAX CALLED THE REPORT FROM THE JOINT COMM ISSIONER OF INCOME TAX, RANGE-3, FEROZEPUR, THAT UNDER WHOSE JURISDICT ION THE CASE FALLS. THE REPORT OF JOINT COMMISSIONER OF INCOME TAX, RAN GE-3, FEROZEPUR, WAS RECEIVED ON 14.05.2010 VIDE HIS LETTER DATED 11 .05.2010, IN WHICH HE HAS NOT RECOMMENDED THE CASE OF THE APPELLANT/APPLI CANT SOCIETY FOR GRANT OF APPROVAL UNDER SECTION 80G OF THE ACT ON THE FOL LOWING GROUNDS: THE PERUSAL OF THE CONSTITUTION OF THE SOCIETY REV EALS THAT IN PARA 2 IT HAS BEEN MENTIONED THAT THE OBJECT OF T HE SOCIETY SHALL BE TO WORK FOR SOCIAL, CULTURAL, PHYSICAL, RELIGIOUS A ND MORAL UPLIFT OF THE SIKHS IN GENERAL AND IN PARTICULARS TO IMPART EDUCA TION IN ARTS, SCIENCE, SPORTS AND VOCATION FOR ALL THE PEOPLE. SECTION 80G APPLIES TO DONATIONS TO ANY INSTITUTION OR FUNDS REFERRED TO IN THE SUB-CLAUSE (IV) OF CLAUSE (A) OF THE SUB-SECTION (2) ONLY IF CERTAIN CONDITION ARE FULFILLED BY IT. ONE OF THE CONDITIONS IS SPECIFIED U/S 80G(5)(III) WHICH IS RE-PRODUCED BELO W:- THE INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. ACCORDINGLY, THE ASSESSEE WAS REQUIRED TO EXPLAIN W HY ITS APPLICATION FOR APPROVAL U/S 80G MAY NOT BE REJECTE D AS IT DOES NOT FULFILL THE CONDITIONS SPECIFIED U/S 80G(5)(III) OF THE I.T. ACT, 1961. THE APPLICANT SOCIETY, VIDE ITS REPLY RECEIVED IN T HIS OFFICE ON 26.08.2010 HAS STATED AS UNDER:- THAT THE OBJECTS OF THE SOCIETY SHALL BE TO WORK F OR SOCIAL, CULTURAL, PHYSICAL, RELIGIOUS AND MORAL UPLIFT OF T HE SIKHS IN GENERAL AND IN PARTICULARS TO IMPART EDUCATION IN ARTS, SCI ENCE SPORT AND VOCATIONS FOR ALL THE PEOPLE. 3 I.T.A. NO. 422(ASR)/2010 3. THE CONTENTION OF THE SAID REPORT WAS COMMUNICAT ED TO THE APPELLANT/APPLICANT SOCIETY, IN RESPONSE TO THE SAM E; THE APPELLANT/APPLICANT SOCIETY SUBMITTED THAT THOUGH T HERE ARE SO MANY OBJECTS MENTIONED IN THE MEMORANDUM OF SOCIETY BUT THE SOCIETY IS ONLY PROVIDING EDUCATION TO ALL SECTIONS OF THE SOCIETY NOT ONLY TO THE SIKH COMMUNITY. THE OBJECT OF THE SOCIETY IS TRULY AND S INCERELY CARRIED BY THE SOCIETY SINCE ITS INCEPTION WITHOUT ANY DISCRIMINAT ION BETWEEN ANY COMMUNITIES AT ALL. SECONDLY, THE SOCIETY IS REGIST ERED WITH GOVERNMENT AS WELL AS WITH THE COMMISSIONER OF INCOME TAX, BAT HINDA, UNDER SECTION 12AA OF THE ACT AND WAS DULY APPROVED BY CH IEF COMMISSIONER OF INCOME TAX, AMRITSAR, UNDER SECTION 10(23C)(VI) OF THE ACT. SINCE ITS FORMATION NO OTHER CHARITABLE ACTIVITIES HAVE BEEN CARRIED OUT EXCEPT RUNNING SOME EDUCATIONAL AND MEDICAL INSTITUTION. 4. THE REPLY OF THE SOCIETY WAS CONSIDERED BY LEARN ED CIT, BATHINDA, ALONG WITH OTHER DOCUMENTARY EVIDENCE AS WELL AS THE CASE-LAW CITED BY THE APPELLANT/APPLICANT SOCIETY AND FINALL Y THE LEARNED COMMISSIONER OF INCOME TAX, BATHINDA, HAS HELD THAT THE OBJECT OF SOCIETY IS WRITTEN IN PARA NO. 2 OF THE IMPUGNED OR DER, WHICH ARE REPRODUCED AS UNDER: 4 I.T.A. NO. 422(ASR)/2010 THE OBJECT OF THE SOCIETY SHALL BE TO WORK FOR SO CIAL, CULTURAL, PHYSICAL, RELIGIOUS AND MORAL UPLIFT OF THE SIKHS I N GENERAL AND IN PARTICULARS TO IMPART EDUCATION IN ARTS, SCIENCE, S PORTS AND VOCATIONS FOR ALL THE PEOPLE. 5. SINCE SIKHS ARE A PARTICULAR RELIGIOUS COMMUNITY , THE APPELLANT/APPLICANT SOCIETY IS APPARENTLY EXPRESSED TO BE FOR THE BENEFIT OF A PARTICULAR RELIGIOUS COMMUNITY. HE OBSERVED TH AT THE SOCIETY CLEARLY VIOLATES THE STATUTORY CONDITIONS PRESCRIBED UNDER CLAUSE (III) OF SUB- SECTION (5) OF SECTION 80G BY PROVIDING IN ITS CONS TITUTION THAT THE SOCIETY EXISTS FOR A PARTICULAR RELIGION OR COMMUNITY. LEA RNED CIT, BATHINDA, HAS ALSO HELD THAT IN THE CASE OF APPELLANT/APPLICANT S OCIETY ONLY SIKH CAN BECOME A MEMBER OF ASSESSEE I.E. SANGAT SAHIB BHAI PHERU SIKH EDUCATIONAL SOCIETY, TALWANDI ROAD, FARIDKOT. THEREFORE, THERE IS A CLEAR VIOLATION OF STATUTORY CLAUSE (III) OF SECTIO N 80G(5) OF THE ACT. LASTLY, LEARNED CIT, BATHINDA, HAS CONCLUDED THAT T HE OBJECTS OF THE SOCIETY ARE TO WORK FOR SOCIAL, CULTURAL, PHYSICAL, RELIGIOUS AND MORAL UPLIFT OF THE SIKH IN GENERAL, THE NAME OF THE SOCI ETY IS SANGAT SAHIB BHAI PHERU SIKH EDUCATIONAL SOCIETY, TALWANDI ROAD, FARIDKOT , AND ONLY A SIKH CAN BECOME MEMBER OF THE GENERAL COUNCIL OF SOCIET Y. ALL THESE LEADS TO THE DEFINITE CONCLUSION THAT THERE I S LIKELIHOOD THAT THE SOCIETY IS EXPRESSED TO BE FOR THE BENEFIT OF A PAR TICULAR RELIGIOUS 5 I.T.A. NO. 422(ASR)/2010 COMMUNITY AND THUS DOES NOT FULFILL THE CONDITION O F CLAUSE (III) OF SECTION 80G(5) OF THE ACT. ACCORDINGLY, HE REJECTED THE APPLICATION FILED BY THE APPELLANT/APPLICANT SOCIETY ON 22.03.2010 FO R THE APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT VIDE IMPUGNED ORDER D ATED 31.08.2010, 6. AGGRIEVED WITH THE IMPUGNED ORDER DATED 31.08.20 10 PASSED BY LEARNED CIT, BATHINDA, THE ASSESSEE FILED THE PRESE NT APPEAL. 7. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE FILED THREE PAGES WRITTEN SUBMISSION ALONG WITH THE SMALL PAPER BOOK, CONTAINING PAGES FROM 1 TO 14, IN WHICH HE HAS ATTA CHED THE COPY OF LETTER FILED BEFORE THE COMMISSIONER OF INCOME TAX- BATHINDA; COPY OF LETTER FILED BEFORE ASSISTANT COMMISSIONER OF INCOM E TAX-III-FEROZEPUR; COPY OF ORDER DATED 17.03.2003 OF COMMISSIONER OF I NCOME TAX- BATHINDA, REGARDING REGISTRATION U/S 12AA ALLOWED W .E.F. 01.04.1996; COPY OF FORM NO. 10-G OF THE ASSESSEE SOCIETY; COPY OF THE ORDER DATED 18.03.2010 U/S 10(23C)(VI) OF CHIEF COMMISSIONER OF INCOME TAX- AMRITSAR OF THE ASSESSEE SOCIETY RELATING TO ASSESS MENT YEAR 2009-10 AND ONWARDS; AND COPY OF CONSTITUTION OF ASSESSEE SOCIE TY. 8. HE STATED THAT THE LEARNED CIT, BATHINDA, HAS TA KEN A VERY NARROW MEANING OF SECTION 80G(5)(VI) OF THE ACT. TH E ASSESSEE IS AN 6 I.T.A. NO. 422(ASR)/2010 EDUCATIONAL SOCIETY AND ITS PURPOSE IS TO IMPART ED UCATION TO ALL PEOPLE NOT FOR SPECIFIC RELIGION, CASTE AND CREED. THEREFO RE, THE IMPUGNED ORDER PASSED BY LEARNED CIT, BATHINDA, IS AGAINST THE PRO VISIONS OF LAW AND THE SAME MAY BE CANCELLED BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 9. LEARNED DR RELIED UPON THE IMPUGNED ORDER PASSED BY LEARNED CIT, BATHINDA. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE DOCUMENTARY EVIDE NCE FILED BY LEARNED COUNSEL FOR THE ASSESSEE WHICH HE HAS FILED IN THE SHAPE OF SMALL PAPER BOOK. FOR THE SAKE OF CONVENIENCE, THE RELEVANT POR TION OF THE CONSTITUTION OF THE APPELLANT/APPLICANT SOCIETY IS REPRODUCED AS UNDER: CONSTITUTION FOR THE SANGAT SAHIB BHAI PHERU SIKH EDUCATIONAL SOCIETY, FARIDKOT. 1. THE NAME OF THE SOCIETY WILL BE SANGAT SAHIB B HAI PHERU SIKH EDUCATIONAL SOCIETY, FARIDKOT. 2. THE OBJECT OF SOCIETY SHALL BE TO WORK FOR SO CIAL, CULTURAL, PHYSICAL, RELIGIOUS AND MORAL UPLIFT OF THE SIKHS IN GENERAL AND IN PARTICULAR TO IMPART EDUCATION IN ARTS, SCIENCE, SPORTS AND VOCAT IONS FOR ALL THE PEOPLE. 3 4 5 6. 7 I.T.A. NO. 422(ASR)/2010 7. EVERY ADULT SIKH CAN BECOME A MEMBER OF THE G ENERAL COUNCIL (SUBJECT TO THE APPROVAL OF THE EXECUTIVE COMMITTEE ) BY PAYING AN ANNUAL SUBSCRIPTION OF RS. 1000/- IN ADVANCE TO THE NEXT A CADEMIC YEAR OR A LUMP SUM OF RS. 5000/-. .. 11. KEEPING IN VIEW THE RELEVANT PORTION OF THE CONS TITUTION REPRODUCED ABOVE, WE ARE OF THE VIEW THAT THE OBJEC TS OF THE SOCIETY IS ONLY TO UPLIFT THE SIKH COMMUNITY NOT ANY OTHER CAS TE, RELIGION OR CREED. THIS INSTITUTION HAS BEEN ESTABLISHED ONLY TO IMPAR T EDUCATION IN ARTS, SCIENCE, SPORTS AND VOCATIONS AND FOR ALL THESE PEO PLES ONLY. SECONDLY, AS REGARDS TO THE MEMBER OF THE GENERAL COUNCIL OF THE APPELLANT/APPLICANT SOCIETY ONLY SIKH CAN BECOME A MEMBER OF THE GENERA L COUNCIL NOT ANY OTHER PERSON IS ELIGIBLE TO BECOME A MEMBER OF THE SOCIETY. 12. KEEPING IN VIEW THE PROVISION OF SECTION 80G(5)( III) OF THE ACT THERE ARE SOME CONDITIONS WHICH HAVE TO BE FULFILLE D TO SEEK THE EDUCATION IN RESPECT OF DONATIONS TO CERTAIN FUNDS FOR CHARIT ABLE INSTITUTION ETC. FOR THE SAKE OF CONVENIENCE, RELEVANT PART OF THE PROVI SIONS OF SECTION 80G(5)(III) IS REPRODUCED AS UNDER: DEDUCTION IN RESPECT OF DONATIONS TO CERTAIN FUNDS , CHARITABLE INSTITUTIONS, ETC. SECTION 80G (5): THIS SECTION APPLIES TO DONATIONS TO ANY INSTITUTIO N OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) O F SUB-SECTION (2), ONLY IF 8 I.T.A. NO. 422(ASR)/2010 IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE S AND IF IT FULFILLS THE FOLLOWING CONDITIONS, NAMELY- (I) (II) .. (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE; . 13. KEEPING IN VIEW THE AFORESAID CONSTITUTION OF TH E APPELLANT/APPLICANT AS WELL AS THE RELEVANT PROVISI ON OF LAW I.E. SECTION 80G(5)(III), WE ARE OF THE CONSIDERED VIEW THAT IT IS MATTER OF RECORD THAT THE APPELLANT/APPLICANT SOCIETY IS ONLY MADE TO UPL IFT ONE COMMUNITY I.E. SIKH COMMUNITY AND IMPARTING VARIOUS TYPES OF EDUCA TION TO THEM WHICH INCLUDES SOCIAL, CULTURAL, PHYSICAL, RELIGIOUS AND MORAL UPLIFT AS WELL AS IN THE SPHERE OF ARTS, SCIENCE, SPORTS AND VOCATION. 14. IT IS ALSO A MATTER OF RECORD THAT ONLY SIKH CAN BECOME A MEMBER OF THE GENERAL COMMUNITY OF THE APPELLANT/AP PLICANT SOCIETY WHO IS CONTROLLING THE ENTIRE ADMINISTRATION OF THE INSTITUTIONS RUN BY THE SOCIETY, WHICH IS CLEARLY CONTRARY TO THE PROVISION S OF SECTION 80G(5)(III) OF THE ACT. 15. IN OUR CONSIDERED VIEW, THE APPELLANT/APPLICANT SOCIETY DOES NOT FULFILL THE CONDITIONS PRESCRIBED UNDER SECTION 80G (5)(III) OF THE ACT, 9 I.T.A. NO. 422(ASR)/2010 THEREFORE, THE APPELLANT/APPLICANT SOCIETY IS NOT E NTITLED FOR THE APPROVAL UNDER SECTION 80G(5)(IV) OF THE ACT. 16. AS REGARDS TO THE ARGUMENT ADVANCED BY LEARNED C OUNSEL FOR THE ASSESSEE ALONG WITH OTHER RELEVANT MATERIALS AVAILA BLE WITH US, WE HAVE THOROUGHLY GONE THROUGH THE SAME AND WE ARE OF THE CONSIDERED VIEW THAT LEARNED COUNSEL FOR THE ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE, ESTABLISHING THAT THE APPELLANT/APPLICANT SOCIETY I S NOT ONLY WORKING FOR UPLIFT OF THE SIKHS BUT FOR GENERAL COMMUNITY ALSO. THERE IS NO PIECE OF EVIDENCE ON RECORD ESTABLISHING THAT A NON-SIKH CAN BECOME A MEMBER OF GENERAL COUNCIL OF THE APPELLANT/APPLICANT SOCIETY. THEREFORE, THE DOCUMENTARY EVIDENCE FILED BY LEARNED COUNSEL FOR T HE ASSESSEE IS NOT HELPFUL IN THE PRESENT CASE. 17. IT IS VERY MUCH CLEAR FROM THE NAME OF THE APPEL LANT/APPLICANT SOCIETY I.E. SANGAT SAHIB BHAI PHERU SIKH EDUCATIONAL SOCIETY, FARIDKOT AS WELL AS THE CONSTITUTION ALONG WITH AIMS AND OB JECTS OF THE APPELLANT/APPLICANT SOCIETY THAT THE SOCIETY IS NOT DOING ANY CHARITABLE WORK FOR UPLIFT OF GENERAL COMMUNITY AND USING ITS FUNDS ONLY FOR UPLIFT OF SIKH COMMUNITY BY PROVIDING EDUCATION IN VARIOUS FIELDS, WHICH IS CONTRARY TO THE PROVISION OF SECTION 80G(5)(III) ME NTIONED ABOVE. IN OUR 10 I.T.A. NO. 422(ASR)/2010 CONSIDERED VIEW, THE ASSESSEE IS NOT ENTITLED FOR T HE APPROVAL UNDER SECTION 80G(5)(IV) OF THE ACT AND LEARNED CIT, BATH INDA, HAS RIGHTLY REJECTED THE APPLICATION OF THE APPELLANT/APPLICANT SOCIETY BY PASSING THE IMPUGNED ORDER. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER DATED 31.08.2010 PASSED BY LEARNED CIT, BATHINDA, AND DIS MISS THE APPEAL FILED BY THE ASSESSEE. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH FEBRUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SANGAT SAHIB BHAI PHERU SIKH EDUCATI ONAL SOCIETY, FARIDKOT. 2. THE CIT, BATHINDA. 3. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.